BUSINESS OF COMPANIES FROM THE STOCK EXCHANGE Lost race with inflation, profit stagnated, only Crobex grew

Companies listed on the Zagreb Stock Exchange achieved only 2.7 percent revenue growth last year, and their profits stagnated. These are the results of 67 companies (excluding banks and insurance) that submitted their annual financial reports by the end of last week. The first results from 28 largest foreign companies, which have a different commercial year than the calendar year and which submitted reports covering the first half or the first three quarters of last year, already indicated a slowdown compared to the record 2022, and the stock market results confirm this.

However, it should be noted that due to the relatively small sample, the results of the largest company significantly alter the picture of the analysis. INA has a share in the revenues of these companies of 29 percent (35 percent the year before). Therefore, its 15 percent drop in revenue last year significantly worsened the results of the entire stock exchange. Namely, the other 66 companies increased their revenues by 12 percent (instead of 2.7 percent) and reported 15 percent higher profits. Changes in revenues are similar to the preliminary changes in revenues of the aforementioned 28 foreign-owned companies, which grew by 11 percent. It can be expected that the rest of the economy will be close to such growth.

The largest revenue growth was achieved by Vodoprivreda Zagreb (94 percent), Tehnika (82 percent), and the real estate company owned by AZ pension funds Primo Real Estate (73 percent). All of them are in one way or another connected to the construction sector, so it can be concluded which activity was the most lucrative last year. Alongside construction, the tourism sector is also significant. Of the five companies that turned from losses in 2022 to profits last year, one is a construction company, Tehnika, three are hoteliers (Jadran from Crikvenica, Villa Dubrovnik, and Liburnia Riviera Hotels), and the airline Croatia Airlines also turned positive, primarily due to the increase in tourist traffic.

On the other hand, as many as 18 of the observed 67 companies reduced their revenues last year. This list is led by Vjesnik with a drop of as much as 62 percent, which is logical as it is in liquidation. However, it is followed by companies with a significantly different business reputation: Atlantska plovidba (drop of 41 percent) and Alpha Adriatic (37 percent). When adding the 30 percent drop in revenue of Jadroplov, it is evident that last year was very bad for shipowners. After all, all three of these companies slipped from usually positive business into the negative and reported losses. Alongside them, new losers include Dalekovod, Stanovi Jadran, and Maraska (with a slight loss of 3,300 euros).

It is not a new claim that stock prices are not corded to business results. Sometimes shareholders will reward the payment of a good dividend better than they will punish poorer business results. The credibility of management and sentiment (which is a general optimism reflected in the growth of consumption) are also important factors in forming stock prices. Therefore, it is not surprising that in a year when companies from the stock exchange cumulatively stagnated (and lost the race with inflation), Crobex grew by more than 28 percent.